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Are Homebuyers Stepping Back Into the Market?

loan applications

According to the latest weekly survey conducting by Mortgage Bankers Association (MBA) for the week ending on May 22, spring has brought a surge in mortgage applications to the housing industry. 

The MBA revealed that the number of mortgage applications rose 2.7% from the prior weeks statistics.

This weekly survey, known as the Market Composite Index, measures the volume of mortgage loan applications on a weekly basis. This 2.7% shows the seasonally adjusted amount, while unadjusted results reveal a 3% rise from the previous week.

As for the Refinance Index, MBAs report divulged a decrease of 0.2% within the same weeks time frame, while the Purchase Index (seasonally adjusted) was shown to have risen 9%. When unadjusted, the Purchase Index revealed a rise of 7%. 

Joel Kan, MBAs AVP of Economic and Industry Forecasting, commented on this week’s rise in applications: "The housing market is continuing its path to recovery as various states reopen, leading to more buyers resuming their home search. Purchase applications increased 9% last week—the sixth consecutive weekly increase and a jump of 54% since early April. Additionally, the purchase loan amount has increased steadily in recent weeks and is now at its highest level since mid-March.

Kan added even more details that point to hope on the horizon: "Despite mortgage rates hovering near MBA's all-time survey low, refinance activity was essentially flat but still 176% higher than last year. Conventional refinance applications increased 2%, while government refinancing was down almost 7%.

Further details in the report state the refinance share of mortgage activity, which fell to 62.6% of total applications (the previous week was at 64.3%). As for the adjustable-rate mortgage (ARM) share of activity, that rose to make up 3.4% of all placed applications.

Odeta Kushi, Deputy Chief Economist with First American Financial Corporation, said on Twitter that while purchase applications are up 54% since April, the lack of inventory could lead to further house-price appreciation. 

 

About Author: Andy Beth Miller

Andy Beth Miller is a well-established freelance editor and writer with almost 20 years’ experience working within the media industry, contributing to various publications such as Lonely Planet, Zicasso, Honolulu Star-Advertiser, Midweek Magazine, Kauai Traveler Magazine, HILuxury, and many more. She also currently serves as the Editor-in-Chief of ProcuRising Magazine, which enables procurement professionals to increase their knowledge base within a creative and collaborative community.
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